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That's a somewhat misleading question. How well targeted the traffic is makes a huge difference, and that varies from keyword to keyword.

I track conversions for each keyword, and you would be surprised how much the EPC varies from keyword to keyword.

I typically find network EPCs to be low. Well targeted PPCSE traffic from quality SEs (i.e. Google and Overture) are typically much better targeted than "average" affiliate sites. Of course there are always exceptions. Sometimes, the EPC numbers on the network for some merchants are heavily inflated by large affiliates that make considerably higher than the average commission levels.

I've been looking to diversify my marketing and wanted to get into some paid search. I guess what I'm trying to find out is how to gage what CPA programs will be successful before investing my time and money.

CJ reports EPC by link so I was thinking of using a few text link EPCs as metrics to help me decide which programs might be profitable vs not. I realize text links are also used on content sites but they've got to be somewhat representative of PPC performance as I'm sure many search marketers use the destination urls from text links opposed to banner ads. I realize that measuring results for each keyword is critical but without performance history how do you know which program will work in paid search?

Good old fashioned trial and error. Just because you see a high EPC for a text link doesn't mean you'll get the same. You might get less, you might get more. Lots of factors. How targetted your traffic is. Maybe I see a low EPC for a home page text link to a merchant but if I put it alongside a 30% off coupon, maybe I get a nice EPC. You just have to test it out.

and in some places the epc is artificially low for any number of reasons. assuming what you do differs from the average (hehehee), there's no reason to believe the average epc will apply to you. I'm in one program for instance, where they have a 3-month average epc of roughly $42 (and very steady) and my epc with them is more than double that and at times comes close to triple that. I have another profitable program where my epc is < 70% of the program's average epc and I still make excellent profits. Go figure.

Keep in mind that epc is an "earnings per click" metric and totally ignores the cost of getting those clicks...

I suppose it is a matter of educated guessing, trial and error as TrustNo1 pointed out. My next question has to do with testing paid search performance. What sample size would you say is sufficient for testing a program? I read in Andrew Goodman's book 'Winning Results with Google Adwords' that a sample size of about 100 clicks is usually enough to gage a programs potential.

I assume it depends on the product and how frequent those clicks occur - I may get 100 clicks in 4 hours on a Saturday which would probably not be the best representation of a programs long term performance. Do any of you have a recommended sample size and date range for testing new paid search campaigns?

Keep drinking the PPCSE arbitrige Koolaid folks. All the major networks, all the CPA networks, all the Super affiliates -all the DMA and IAB members -all major multi-product line merchants individually manage hundreds of thousands of keywords combinations with INSIDER INFORMATION you don't have at your disposal. Some Super Affiliates brag they manage millions of totally automated (direct to merchant) buying keywords washing hundreds of millions of affiliate return day cookies daily.

Until this industry forbids direct to merchant PPCSE buys and bars any merchant, or network run SEM campaigns that set merchant house account tracking cookies, there can be no legitimate earning potential for domain bound affiliates. Remember the networks also harbor/protect the cookie stuffers (couponer/deal sites) and the force click BHO's who attack our return day referral cookies at the Point of Sale too!

Webmaster's... Mike and Charlie

"What have you done today to put real value into a referral click...from a shoppers viewpoint!"

Keep drinking the PPCSE arbitrige Koolaid folks. All the major networks, all the CPA networks, all the Super affiliates -all the DMA and IAB members -all major multi-product line merchants individually manage hundreds of thousands of keywords combinations with INSIDER INFORMATION you don't have at your disposal.

100 clicks sample size is way too small for most things... it does depend on many factors, but I'd say 100 is a ROUGH estimate and 500 is more than enough to make sound decisions. Somewhere in between is a relatively certain place... perhaps 300 clicks, but again can vary with many factors. In addition to number of clicks, I'd also say that you need some time spread, 300 clicks in 20 minutes might not be a meaningful sample. Look over several days at least and allow a few days after the run to allow for any return day sales to clcok in. Shoot for 500 clicks whenever possible.

Keep drinking the PPCSE arbitrige Koolaid folks. All the major networks, all the CPA networks, all the Super affiliates -all the DMA and IAB members -all major multi-product line merchants individually manage hundreds of thousands of keywords combinations with INSIDER INFORMATION you don't have at your disposal. Some Super Affiliates brag they manage millions of totally automated (direct to merchant) buying keywords washing hundreds of millions of affiliate return day cookies daily.

Until this industry forbids direct to merchant PPCSE buys and bars any merchant, or network run SEM campaigns that set merchant house account tracking cookies, there can be no legitimate earning potential for domain bound affiliates. Remember the networks also harbor/protect the cookie stuffers (couponer/deal sites) and the force click BHO's who attack our return day referral cookies at the Point of Sale too!

I get the gist of your post but the bolded part is an overstatement. I know some domain-bound affiliates who are making good money. Would these domain affiliate make a lot more money without the direct ppcse folks, most certainly. The trend with quality merchants is to not allow direct ppc, so I think the industry is at least partially policing itself here.

What sample size would you say is sufficient for testing a program? I read in Andrew Goodman's book 'Winning Results with Google Adwords' that a sample size of about 100 clicks is usually enough to gage a programs potential.

I would say that "a sufficient sample for testing" is better measured by the number of sales rather than the number of clicks. Enough clicks to get 10 sales is what I would consider a good minimum. Enough clicks to get 20 sales is even better. If you get a 10% conversion, 100 clicks is fine. If you have something with a 1% conversion, however, 100 clicks is pretty meaningless.

MC, so if you got to 300 clicks and had no sales, normally you'd keep going?

I do agree with your "If you get a 10% conversion, 100 clicks is fine", but on the other end of your method, I'd be concerned myself even if it was a very high ticket item. The positive cases (sales) in the sample size are so infrequent that there'd be wild gyrations in the conversion rate and would make it very hard to forecast and control.

And I think this poster, by asking about search arbitrage, is talking about ppc costs... so even if it's a very high ticket, for me, the low converting % scenario is an untenable risk. But I guess if you have deep pockets, it might be something attractive because it might be free of many others doing it. I'd hope the poster here understands the elevated risk at the low end of the converting percentage spectrum.

MC, so if you got to 300 clicks and had no sales, normally you'd keep going?

It depends, but probably not. I don't like to promote things with a conversion ratio under 1%, and if I see 0 sales out of the first 300 clicks, that keyword/link almost definitely has a conversion ratio under 1%. (If the conversion ratio were 1%, there's only a 5% chance that you'd get 300 clicks without a sale.)

You can still do okay with low converting stuff, if the payout is high enough and your CPC is low enough. For instance, if you get a 1/1000 conversion and your CPC is $0.05, it costs you $50 for enough clicks to get one conversion. If your payout is $100 or more, that's not bad.